AI Drafter 
TaxTMI 
TaxTMI 
2018 (12) TMI 1899
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....tative of the assessee has submitted that the issue no. 1 to 3 has duly been covered in favour of the assessee by the decision of the Hon'ble ITAT, Mumbai Bench in the assessee's own case, therefore, the claim of the assessee is liable to be allowed. 3. Per contra the Ld. Departmental Representative did not dispute the proposition that the issue is covered in favour of the assessee by the decision of the Hon'ble ITAT in the assessee's own case. 4. We have heard the argument and advanced by the Ld. Representative of the parties and perused the record. The copy of the order for the A.Y. 2010-11 in the assessee's own case in ITA. No.1667/M/2014 dated 13.02.2015 is on the file in which the relevant finding has been given in para no. 5 & 6....
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....ating to such personnel and (ii) payment of all wages, Taxes and other cost and expenses relating to such personnel (including unemployment, social security and other payroll taxes) and compliance with all withholding requirements as required by Law." 5.1 Before we proceed to examine, whether SRSIPL and its activities constitute PE of the assessee or whether SRSIPL can be considered as a Service PE/ Agency PE of the assessee, it would be appropriate at the outset to consider the decision of the Hon'ble Delhi High Court in the case of E-Funds IT Services (supra), wherein Hon'ble Court has held that establishing subsidiary in the other treaty country would not result in creating and establishing a PE of a foreign holding comp....
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....rovided further that where such broker, general commission agent or any other agent works mainly or wholly on behalf of a non-resident (hereafter in this proviso referred to as the principal non-resident) or on behalf of such non-resident and other non- residents which are controlled by the principal non-resident or have a controlling interest in the principal non-resident or are subject to the same common control as the principal non-resident, he shall not be deemed to be a broker, general commission agent or an agent of an independent status." 5.2 A perusal of the facts of the case in hand go to show that none of the conditions specified in clause (a)(b) & (c) above are satisfied. Therefore, it cannot be said that the assessee is....
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.... independent status to whom paragraph 6 applies." 5.4 Thus, it can be seen that reinsurance has been specifically excluded by the Treaty. Let us also now consider the relevant extract of OECD commentary of Article 5- Taxation of Services. Clause 42.30 reads as under: " 42.30 The provision applies to services performed by an enterprise. Thus, services must be provided by the enterprise to third parties. Clearly, the provision could not have the effect of deeming an enterprise to have a permanent establishment merely because services are provided to that enterprise. For example, services might be provided by an individual to his employer without that employer performing any services (e.g. an employee who provides manufacturi....
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....e employees, on these facts the Indian subsidiary was considered as place of business. However, facts of the case in hand clearly show that the employees of the SRSIPL has only provided services to SRSIPL and there is no noting on record to prove that the employees had provided services to the assessee or the assessee is paying their salaries or perquisites. The decision of the Hon'ble Supreme Court in the case of Morgan Stanley (supra) has been duly considered by the Hon'ble Delhi High Court in the case of E-Funds IT Solutions (supra). The decision in the case of Jebon Corporation of Indi(supra) is not at all relevant on the facts of the case in hand. 5.6 To sum up, the assessee does not have any business connection in Ind....